What are rechargeable expenses?

Rechargeable expenses are business costs you incur on behalf of a client that can be legitimately passed on and reimbursed. These include travel costs, materials purchased specifically for the client's project, accommodation, and other direct project expenses.

How do I charge VAT on rechargeable expenses?

If you're VAT registered, you typically don't charge VAT on genuine rechargeable expenses that you're simply passing through. However, if you add a markup or handling fee, VAT applies to that additional charge. Always keep detailed records and receipts.

What expenses can I legitimately recharge to clients?

You can recharge expenses that are directly related to the client's work, agreed upon in advance, and properly documented. This includes travel, accommodation, materials, subcontractor costs, and specific software licences purchased for the project.

Do I need to keep receipts for rechargeable expenses?

Yes, you must keep all original receipts and invoices for rechargeable expenses. These serve as proof for both your client billing and HMRC compliance, and should be retained for at least 6 years.

How should I document rechargeable expenses in my accounts?

Record the initial expense as a business cost, then create a separate invoice line for the recharge to your client. This maintains clear audit trails and ensures proper accounting treatment for both the expense and the reimbursement.

Can I add a markup to rechargeable expenses?

Yes, you can add a reasonable handling fee or markup to cover administrative costs, but this must be agreed with the client beforehand. The markup portion is subject to VAT if you're registered, and should be clearly itemised on your invoice.

What's the difference between rechargeable expenses and business expenses?

Business expenses are costs you incur for running your own business, whilst rechargeable expenses are costs incurred specifically on behalf of a client that will be reimbursed. Rechargeable expenses don't reduce your taxable profit as they're offset by the client reimbursement.

How quickly should I bill clients for rechargeable expenses?

Bill rechargeable expenses as soon as possible, ideally within 30 days of incurring the cost. This maintains healthy cash flow and reduces the risk of disputes over older expenses that clients may have forgotten about.

What are Rechargeable Expense: expensing a client?

Recharging expenses allows businesses to recover costs incurred on behalf of clients by billing them back for specific expenditures like travel, materials, or third-party services, ensuring these client-related expenses don't impact your profit margins while maintaining accurate financial records for HMRC reporting.

Published Apr 13, 2021

Last updated Jan 29, 2026

5 min read

Written by Jordan MaceyAAT

What are Rechargeable Expense: expensing a client?

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<p>Rechargeable expenses are expenses that are incurred during the performance of your work that you can recharge or recover from your client or agency.</p>

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What are Rechargeable Expense: expensing a client?

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